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Progressive warns of Q1 growth in miles driven by customers

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Progressive warns of Q1 growth in miles driven by customers

saw an uptick inthe number of miles driven by its customers in the first quarter, a trend thatthe auto insurer cautioned could lead to a higher number of claims.

TheOhio-based company said May 6 that people drove more and for longer distancescompared with the prior-year period, according to data collected through itsusage-based Snapshot product. That represented a shift from the 2015 fourthquarter, when customer driving miles were relatively flat year over year.

Thesurge could be attributable at least in part to the lower gas prices seenthrough the early part of 2016, Chairman, President and CEO Glenn Renwick saidduring a question-and-answer session with analysts. With more cars on the road,there is a greater chance of accidents that will lead to insurance claims.

"Wemay see a little bit of a tick up in frequency," Renwick said, adding thatpeople already tend to drive more as the weather gets warmer. "That trackswith gasoline demand; that all makes reasonable sense."

Yetdespite the short-term shifts, Renwick expects the number of auto accidents totrend lower over a longer period. Cars are becoming safer and increasinglyboast technology aimed at avoiding crashes. The larger concern for Progressiveis the severity of the accidents that do happen, as a larger percentage of thepopulation takes to the road.

"Thefact is we've made our cars safer in this country for the last 30 years, andthere's nothing on the immediate horizon that suggests that we're not going tomake them continuously safer," he said. "My mindset is that along-term strategic view is that we will see fewer accidents and more expensiveaccidents."